The Client – Agency Value Equation
As someone who’s worked in agencies of all shapes and sizes (and across different countries), I’ve seen much debate around the notion of delivering value, especially when it comes to media. So much in the media space is driven by the perception of value around rates and fees. But here’s the thing: cheap rates + poor thinking doesn’t equal good value. It equals a wasted opportunity. Which is why I think how we measure value needs to change.
True value starts with having clear and measurable outcomes for any investment agreed before any sort of thinking and planning starts.
When you stop and think about it, very few media briefs are developed with a sole purpose of saving money. The usual goal is to ensure your message lands with the right people, at the right time, to achieve the intent of your marketing strategy.
Does it really matter how much money you save if you don’t actually achieve this?
Or to put it another way, if you’re reaching your goals and growing your profit ROI with each media investment, you’re winning. Simple as that.
However from what I’m seeing, media is too often viewed as a cost centre rather than a profit driver. And I think part of the reason for this comes back to how we view value.
The reality is every agency can give a client value in some shape or size. Most agencies can leverage their media relationships for this, delivering added value through bonus commitments or other similar options. Now to any media partner friends out there reading this, don’t get me wrong; this type of “value” is super important in itself. But it’s only one type of value, and if the pandemic has taught us anything, it’s not always going to be there…
Over the past 18 months, inventory has been getting tighter; clients have been switching channels on and off (as one channel becomes more valuable than the other); networks are struggling to deliver out contract commitments that come with their own monetary value; publishers are finding it a stretch to deliver on bonus commitments. I could go on, and sure, it’s made us nimble, but it’s also the perfect demonstration of why we need to find other ways to demonstrate and deliver real, purposeful value for our clients.
Media is not and should not be traded as a commodity. But more often than not, when client pitches are run via a heavy procurement process, agencies are asked to deliver their media against a CPM commitment, with the result being the agency with the lowest CPM ‘wins’ the business.
American business legend, Warren Buffet famously said “Price is what you pay; value is what you get”. So why do discussions always come down to price? What about the actual strategy and performance of the media being bought?
I remember sitting in a meeting with a client and their media auditors – both of whom will remain nameless – with that feeling of dread in the pit of my stomach knowing all of the hard work we’d put into delivering the client’s media campaign was just going to get truncated into a slide titled something insightful like ‘agency should shift spend from here to here’.
Usually, we have to endure 80 slides of stats, with no clear insights, real meaning or purpose. But, on this occasion the client stood up, halted the presentation and said something like this:
“So, what you’re telling me is that I need to move all my media investments to here, where I MAY get a few more customers. But will they be QUALITY customers?? And what about our overall business goal? Will those handful of additional customers really deliver true value for my business?”.
The auditor tried to rebutt but the client came back again: “Okay ‘John’, if this was your money, your investment – would you bet your house on the result you’ve just said we can achieve by taking your advice?”
In my head I had many #mic drop memes playing out. I almost applauded, and I still applaud that client.
Finally, ‘John’ managed a meek “maybe not all of the investment,” but the meeting was over. This was a client who understood that in order to get maximum value, there are so many layers to achieve the outcome.
It’s not about making a media choice based on delivering efficiencies on cost (i.e cheap), getting more added value (some free midnight to dawn spots, perhaps?) or expense. It’s about understanding what the desired goals and outcomes are, and knowing that it takes more than one channel or programme to kick those goals.
So often areas we pour blood, sweat and sometimes tears into, are forgotten about because there may not be a pure monetary value that can be attributed, or a great audit result from them.
How do we change this? I like to draw a parallel with a rainbow. Would a rainbow be as wonderful if it was just one colour? Nope, it would be just another colour in the sky. But, when all of the colours of a rainbow come together they create something memorable. Value shouldn’t just be deemed as cheap rates or fees; it must be multi-faceted to deliver real outcomes – the client and agency working together, the thinking, the strategy, genuine innovation, smart technology, insightful research, and effective creative all channelled through a true media investment – that’s where you’ll find the real pot of gold.
I thought I’d end with a definition of ‘value’ and translate it into how AFFINITY thinks about our clients’ media investments.
Value (noun) - The value of something such as a quality, attitude, or method is its importance or usefulness. If you place a particular value on something, that is the importance or usefulness you think it has’.
Quality: We focus on the quality of a media investment, not just the dollars and the cents it is priced at.
Attitude: We understand and care about your business and your challenges, to make that investment work its hardest.
Method: We always bring our smarts, skills and tools to deliver the best outcomes for your business.
Usefulness: Ultimately, it’s all about realising the best mix of your media investment, bringing useful and meaningful results.
The AFFINITY media team would love to help ensure your media investment is leading to a pot of gold, and not a bottomless pit. Get in touch at firstname.lastname@example.org to learn more.